Prudential’s critical illness plan offers to pay up to 3 times!
Prudential has launched a critical illness plan that enables policyholders to claim up to three times
the sum assured, subject to certain conditions.
The plan, called ‘PRUmultiple crisis cover’, may be a first here. Most other critical illness plans
are bundled with whole life cover, an endowment plan or term assurance.
Critical illness cover pays out a lump sum if one is diagnosed with any of about 30 illnesses which
have strict standard definitions.
Prudential chief marketing officer Hitesh Shah says: ‘Set against the backdrop of rapidly ageing
populations across Asia, the good news is that people are living longer and health care is
improving. However, we also know that medical costs do rise with age and people may now
suffer from more than one critical illness in their lifetime.’
In the market, critical illness cover can be priced separately from whole life cover. This means
that the policy will pay out once upon the diagnosis of a critical illness, and a second time upon
death.
Most firms also offer ‘accelerated’ critical illness cover bundled with whole life. This means that
the entire policy will pay out once upon diagnosis of a critical illness, and no further claim can be
made. Premiums for ‘accelerated’ policies are more affordable. But those who survive a critical
illness are likely to be deemed uninsurable.
AXA Life, however, does offer a stand-alone critical illness plan.
Prudential has divided the types of critical illnesses into seven groups for the plan. A one-year
waiting period will apply if each claim is made from a different group.
If the first claim is for cancer, however, a five-year waiting period applies for a subsequent claim
for cancer or major organ failure. Upon the first claim, the plan will waive future premiums. The policy term can range from 20 to 98 years, up to the age of 99. The death benefit is minimal at just $3,000.
As an indication of premiums for PRUmultiple crisis cover, a 35-year-old non-smoker male will
pay an annual premium of $1,452 for a 40-year term, for a sum assured of $100,000. In
comparison, a crisis cover rider to an endowment or whole life plan will cost $1,218. The latter is
for a ‘non-accelerated’ type, which means that the life cover for the whole life or endowment will
continue, even if a claim is made for critical illness.
On the probability of a second claim, Mr Shah says that local experience is not available as
policyholders are typically not tracked once a traditional policy has paid out.
Based on UK data, survival rates of breast cancer from research done on women over five-year
periods was 50 per cent from 1971 to 1975; and 80 per cent from 2001 to 2003. Research also
shows that the risk of breast cancer relapse varied from 7 to 13 per cent, depending on which
stage of the disease and the tumour type.
Based on US data, the most life-threatening consequences of diabetes are heart disease and
stroke, which strike diabetes sufferers more than twice the usual rate.
People with diabetes are two to four times more likely to suffer strokes. Once having had a stroke,
they are two to four times as likely to suffer a recurrence. Diabetes is one of the top six killer
diseases in Singapore.
Source:
4 February 2009
Genevieve Cua
The Business Times
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February 26th, 2009 at 1:15 am
Hopefully critical illness cover will get cheaper as medical science improves. Everyone should have critical illness cover before they think about life insurance.